NESHAMINY CONSTRUCTORS, INC. v. EFCO CORP.

Filing 27

OPINION. Signed by Judge Anne E. Thompson on 5/31/2013. (gxh)

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
NESHAMINY CONSTRUCTORS, INC.,
Plaintiff,
Civ. No. 12-7349

v.
EFCO CORP.,

OPINION
Defendant.

THOMPSON, U.S.D.J.
I. INTRODUCTION
This matter has come before the Court upon the Motion to Dismiss filed by Defendant
EFCO Corp. (“Defendant”). (Docket Entry No. 14). Plaintiff Neshaminy Constructors, Inc.
(“Plaintiff”) opposes the motion. (Docket Entry No. 17). The Court has decided the matter upon
consideration of the parties’ written submissions and after conducting oral argument on May 23,
2013. For the reasons given below, Defendant’s motion is granted.
II. BACKGROUND
This case concerns custom-designed concrete forming equipment rented by Plaintiff for
use in a construction project. Plaintiff claims that the designs for the equipment were defective.
For the purposes of the pending motion, the Court considers as true all of Plaintiff’s well-pleaded
factual allegations and recites only those facts relevant to the Court’s analysis. See Fowler v.
UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).

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In October 2009, the New Jersey Department of Transportation (“NJ DOT”) issued bid
documents for a construction project that involved re-constructing a bridge in Estell Manor, New
Jersey. (Docket Entry No. 1 at ¶¶ 6-7). The construction project required compliance with
certain specifications to ensure that the underside of the bridge did not interfere with the passage
of trains below. (Id. at ¶ 8).
Plaintiff submitted a bid for the construction project to NJ DOT on November 19, 2009.
(Id. at ¶ 23). In preparing its bid, Plaintiff relied on a proposal from Defendant for the provision
of custom-designed concrete forming equipment. (Id. at ¶¶ 13, 15-19, 24, 25). Defendant’s
proposal included at least one design that Defendant represented would meet NJ DOT’s
specifications for this particular construction project. (Id. at ¶¶ 15-19).
Plaintiff’s bid was ultimately accepted by NJ DOT, and a contract memorializing the
agreement between Plaintiff and NJ DOT (“Prime Contract”) was executed on February 24,
2010. (Id. at ¶¶ 24-27). Subsequently, Plaintiff and Defendant executed the Rental Agreement,
which set forth the terms for the rental of the custom-designed concrete forming equipment. 1
(See Docket Entry No. 14, Attach. 5, Ex. B). Specifically, the Rental Agreement provides that
EFCO will furnish such EFCO ERECTION DRAWING SERVICE for the said project as
it shall deem necessary for the use of the equipment furnished under this Agreement.
Such drawings shall be checked as to correctness by Customer before use, and failure to
notify EFCO of objection thereto shall constitute approval of them.
(Id.).
The Rental Agreement also contains an integration clause (“Integration Clause”), which
states in pertinent part that

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Plaintiff’s complaint (“Complaint”) does not mention the Rental Agreement. (See Docket Entry No. 1). It states
only that Defendant “continued to provide design services to [Plaintiff] as the Project progressed . . . .” (Id. at ¶ 28).
Plaintiff apparently does not dispute, however, that the parties entered into the Rental Agreement. (See Docket
Entry No. 17).

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[t]his Agreement, together with any duly executed and accepted supplements attached to
it, incorporates any and all agreements and understanding of every kind and nature
concerning the subject matter and no other representation, warranty or estimate of any
kind or nature which is not set forth herein is authorized by nor binding upon the parties.
(Id.). Additionally, the Rental Agreement contains a forum selection clause (“Forum Selection
Clause”). The Forum Selection Clause provides that
[t]his agreement shall be construed and enforced according to the laws of the State of
Iowa. Any action in regard to this agreement or arising out of its terms and conditions
shall be instituted and litigated in the Iowa District Court for Polk County, Iowa;
provided, however, this forum selection clause shall not limit or prohibit EFCO from
instituting or litigating any other action in another venue or jurisdiction against
individuals or entities other than the customer named in this Agreement. Customer
consents to the jurisdiction of such court and agrees that service of process as provided
by the statutes and rules of procedure of Iowa for nonresident persons or foreign
corporations deemed to be doing business in Iowa shall be sufficient.
(Id.).
Several months later, Plaintiff learned of a sag in one of the forms used to shape concrete
for the construction project. (Docket Entry No. 1 at ¶ 29). Upon closer inspection, it was
determined that the sag constituted a deflection greater than that allowed under the Prime
Contract and greater than that shown in the designs submitted by Defendant. (Id. at ¶¶ 30-32).
Upon learning of the sag, Defendant submitted numerous revised designs in an attempt to
cure the defect. (Id. at ¶ 41). Defendant’s fifth revised design finally resolved the deflection
issue; however, the project was delayed approximately two months and Plaintiff incurred extra
costs as a result. (Id. at ¶¶ 41-43).
On November 30, 2012, Plaintiff initiated this lawsuit by filing claims against Defendant
for breach of implied in fact contract, negligent misrepresentation, breach of warranty,
detrimental reliance, promissory estoppel, and breach of a partial settlement agreement. (See
Docket Entry No. 1). Defendant filed the instant Motion to Dismiss on March 8, 2013. (Docket
Entry No. 14).
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III. LEGAL STANDARD
Federal Rule of Civil Procedure 8(a)(2) requires that pleadings contain a “short and plain
statement of the claim showing that the pleader is entitled to relief.” Rule 8 “does not require
detailed factual allegations, but it demands more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotations
omitted). On a motion to dismiss for failure to state a claim, the “defendant bears the burden of
showing that no claim has been presented.” Hedges v. United States, 404 F.3d 744, 750 (3d Cir.
2005).
A district court should conduct a three-part analysis when considering a Rule 12(b)(6)
motion. Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). “First, the court must ‘take note
of the elements a plaintiff must plead to state a claim.’” Id. (quoting Iqbal, 556 U.S. at
675). Second, the court must accept as true all of a plaintiff’s well-pleaded factual allegations
and construe the complaint in the light most favorable to the plaintiff. Fowler v. UPMC
Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009). But, the court should disregard any conclusory
allegations proffered in the complaint. Id. Finally, once the well-pleaded facts have been
identified and the conclusory allegations ignored, a court must next determine whether the “facts
alleged in the complaint are sufficient to show that plaintiff has a ‘plausible claim for
relief.’” Id. at 211 (quoting Iqbal, 556 U.S. at 679). This requires more than a mere allegation
of an entitlement to relief. Id. “A complaint has to ‘show’ such an entitlement with its
facts.” Id. A claim is only plausible if the facts pleaded allow a court to reasonably infer that the
defendant is liable for the misconduct alleged. Id. at 210 (quoting Iqbal, 556 U.S. at 678). Facts
suggesting the “mere possibility of misconduct” fail to show that the plaintiff is entitled to
relief. Id. at 211 (quoting Iqbal, 556 U.S. at 679).

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Additionally, “[a]s a general matter, a district court ruling on a motion to dismiss may not
consider matters extraneous to the pleadings.” In re Burlington Coat Factory Sec. Litig., 114
F.3d 1410, 1426 (3d Cir. 1997) (citing Angelastro v. Prudential-Bache Sec., Inc., 764 F.2d 939,
944 (3d Cir. 1985)). Consideration of such matters generally converts the motion into a motion
for summary judgment. Cahill v. City of New Brunswick, 99 F. Supp. 2d 464, 470 (D.N.J. 2000)
(citing FED. R. CIV. P. 12(b) (“If, on a motion . . . to dismiss for failure of the pleading to state a
claim upon which relief can be granted, matters outside the pleading are presented to and not
excluded by the court, the motion shall be treated as one for summary judgment . . . .”)).
“However, an exception to the general rules is that a document integral to or explicitly
relied upon in the complaint may be considered without converting the motion [to dismiss] into
one for summary judgment.” Burlington Coat, 114 F.3d at 1426 (quotations omitted); see also
Winer Family Trust v. Queen, 503 F.3d 319, 328 (3d Cir. 2007). Furthermore, a Court may
consider a document not “explicitly” mentioned in the Complaint where the claims are “based”
on the document, as a plaintiff “cannot prevent a court from looking at the texts of the documents
on which its claim is based by failing to attach or explicitly cite them.” Burlington Coat, 114
F.3d at 1426.
IV. ANALYSIS
Defendant argues that dismissal of the Complaint is necessary under Rule 12(b)(6)
because (1) the Forum Selection Clause in the Rental Agreement requires Plaintiff to bring its
claims in Iowa state court; (2) the damages sought are excluded by the Rental Agreement; and
(3) Defendant is indemnified under the terms of the Rental Agreement. (Docket Entry No. 14,
Attach. 1). The Court considers first whether the Forum Selection Clause in the Rental
Agreement mandates dismissal.

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As a general matter, a Rule 12(b)(6) motion is an appropriate means of enforcing a forum
selection clause. See Salovaara v. Jackson Nat’l Life Ins. Co., 246 F.3d 289, 298-99 (3d Cir.
2001); TGA Premier Jr. Golf Franchise, LLC v. B P Bevins Golf LLC, No. 12-4321, 2012 WL
4892861, at *2 (D.N.J. Oct. 12, 2012). Plaintiff argues, however, that the Rental Agreement’s
Forum Selection Clause does not bar Plaintiff from pursuing these particular claims in the
District of New Jersey. (Docket Entry No. 17). First, Plaintiff argues that the Rental Agreement
is extraneous to the pleadings and, therefore, not properly considered on a Rule 12(b)(6)
motion. 2 (Id. at 9-11). Additionally, Plaintiff argues that the Rental Agreement, by its terms,
applies only to the rental of the concrete forming equipment, not the equipment’s design, and
therefore, Plaintiff’s claims, which concern only design, are not subject to the Forum Selection
Clause. (Id. at 14-17).
Both arguments require the Court to accept Plaintiff’s premise that the parties entered
into two separate transactions – one pertaining to the design of the equipment and one pertaining
to the rental of the equipment. The Court, however, views the parties’ interactions as a single
business transaction. In reaching this conclusion, the Court notes that the parties bargained for
one thing – the rental of equipment designed to meet the project’s specifications. This
conclusion is further supported by the fact that no consideration was apparently provided for the
pre-bid designs.
Plaintiff argues that, after NJ DOT awarded the bid to Plaintiff, Plaintiff would have been
permitted to enforce Defendant’s proposal by virtue of Plaintiff’s reliance on it. As such,
Plaintiff contends that the parties’ pre-bid negotiations concerning design were, in essence, a
separate transaction. However, this argument overlooks the fact that, after the bid was awarded
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Specifically, Plaintiff argues that its claims, which pertain to the design of the equipment, are not based on the
Rental Agreement, which Plaintiff argues concerns only the rental of the equipment. (Id. at 9-11). Additionally,
Plaintiff notes that the Rental Agreement is not mentioned anywhere in the Complaint. (Id.).

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to Plaintiff, the parties entered into the Rental Agreement, which contained the Integration
Clause. As such, the Court does not agree with Plaintiff that the Rental Agreement did not also
incorporate the parties’ previous negotiations concerning design. Based on this conclusion, the
Court finds that the Rental Agreement is integral to Plaintiff’s claims and, therefore, may be
properly considered at this stage. Similarly, the Court finds that Plaintiff’s claims are subject to
the Rental Agreement’s Forum Selection Clause. Therefore, dismissal of the Complaint is
necessary so Plaintiff may re-file its claims in Iowa state court, 3 and it is unnecessary to consider
Defendant’s other arguments concerning damages and indemnification.
V. CONCLUSION
For the foregoing reasons, the Defendant’s Motion to Dismiss is granted. An appropriate
order will follow.

/s/ Anne E. Thompson
ANNE E. THOMPSON, U.S.D.J.

Date: May 31, 2013

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Plaintiff also argues that even if “the Rental Agreement forum selection clause applies to all of [Plaintiff’s] causes
of action, the Court should decline to dismiss based on the required balancing test.” (Docket Entry No. 17 at 19).
Each of the cases cited by Plaintiff, however, applies a balancing test when deciding whether to transfer between
two federal forums. The Third Circuit has stated that when a forum selection clause specifies a non-federal forum,
“the district court would have no choice but to dismiss the action so it can be filed in the appropriate forum so long
as dismissal would be in the interests of justice.” Salovaara v. Jackson Nat’l Life Ins. Co., 246 F.3d 289, 298 (3d
Cir. 2001) (citations omitted). After reviewing the parties’ arguments, the Court finds no reason why the bargainedfor Forum Selection Clause of the Rental Agreement should not be enforced and this case dismissed.

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